Silver’s Future Looks Bright as the Industrial Sector Recovers from the Impact of COVID-19
Silver prices saw a challenging period in the initial months of this year as the coronavirus outbreak weighed down on demand by the industrial sector.
However, its future appears bullish as the industrial sector has started reopening and recovering faster from the massive brunt of the pandemic, as suggested by the commodity analysts at the Bank of America.
Last month in May, the bank updated its previous price prediction of $16.60 per ounce, suggesting that silver’s price may surge up to an average of $16.87 per ounce by the end of this year.
However, considering the current economic circumstance, the bank believes that silver’s market is likely to rise to an average of$23 per ounce in 2021, increasing from the previous forecast of $22.50 an ounce.
In their report released on Friday, June 12, the bank further estimated that silver might stage above the $18 barrier through the next four years (2024). The precious metal was last trading at $17.55 per ounce on June 25—up 0.09% on the day and up 2.63% compared to last month (see the chart below).
Recovering Industrial Demand Behind the Bullish Outlook?
The analysts in the report suggested that industrial demand remains the most significant factor behind the silver market valuation. They pointed out that due to the lockdown restrictions imposed by the governments to contain the spread of the virus, the demand for silver for industrial applications could decline to a 16-year low.
However, they added that the drop in demand might only be for a brief period as the industrial sector has already started to recover.
Pointing at the recuperation of the industrial sector from the COVID-19 shock, the bank’s analysts said:
“While the unfolding Covid-19 health emergency has had a severe impact on the global economy, we believe that weak GDP growth figures come with a caveat, which means that industrial off take could rebound more quickly than some of the weak sectoral growth data suggests.”
Role of Renewable Energy Sector in the Surging Silver Futures Forecast
The report revealed that the increase in the significance of renewable energies could be a leading factor behind the increased industrial demand for silver.
The governments will be more concerned about the shifting climates because of the ongoing global health emergency that has affected 9,533,141 lives worldwide.
The analysts also argue that governments may be more focused on restoring their contracted economies and that dealing with climate change may not be on the top of their priorities.
The Right Time for Silver Investment
Looking at the surging silver’s future, it would be a fair assumption that now is an ideal time for silver investing. If you want to buy silver bullion coins or open a silver IRA, get in touch with Orion Metal Exchange, the top silver IRA company.
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